March 6, 2007

Australia posts strong domestic demand for red meat
 

Domestic demand for both beef and lamb in Australia strengthened further in 2006, despite high retail prices, strong demand from overseas markets and the prolonged drought.

The rise in domestic usage, expenditure and the demand indices are a result of the effectiveness of recent marketing campaigns, a strong economy and better quality product, according to Meat and Livestock Australia (MLA).

The domestic market continues to be the largest and most stable market for Australia's red meat, with red meat usage (beef and veal, lamb and mutton) in Australia over 1 million tonnes per hundredweight (cwt) in 2006, up 2 percent. At the same time, the preliminary estimates, calculated by MLA and based on Department of Agriculture, Fisheries and Forestry statistics, show expenditure in Australia grew by a massive $480 million in 2006 (up 5.9 percent on 2005) to a record $8.7 billion.

One of the key factors behind the growth in expenditure on lamb was the successful Sam Kekovich Australia Day marketing campaign, which generated a spike in sales during January (retail purchases increased from 23 million serves /week in January 2005 to 26.3 million serves/week in January 2006) and led to a continuation of the strong demand in following months.

Demand for beef and veal was also influenced by the recent nutritional marketing campaigns such as 'We were meant to eat it'. However, competition from other meats at retail, particularly pork, caused beef to lose share, particularly in the second half of 2006.

Domestic expenditure on lamb showed the largest growth in 2006, with a 10.6 percent increase, to $1.9 billion. Lamb volumes increased by 7.2 percent with retail prices up 3.2 percent. Expenditure on beef increased 5.6 percent to $6.5 billion, with volumes up 2.5 percent and retail prices up 3 percent.

Latest demand figures also show that consumer demand for lamb is now the highest it's been since 1985 and demand for beef is the highest since 1990.